Patent life cycle: New evidence

Abstract

Patents and their renewals are critical because they protect inventions and reinforce information reported to investors about the utility and the quality of inventions. Thus, they signal the appropriate use of financial resources being invested, notably in research and development departments, and future revenues for their owner. Based on a sample of about 22,700 European patents, our research contributes to existing literature on patent renewal by two relevant outcomes. The first contribution proposes a possible definition of a European patent life cycle: abandonment of procedure, natural abandonment, and late withdrawal. The second contribution shows two main factors that influence the renewal of a European patent by examining delivery time and the cumulative number of citations. Our results show that the procedure is the key issue of structuring the patent's life. In addition, patents' viability is likely to happen given that a part in a series of patents is increasing, which means that valuable patents are often cited by later ones. The relationship stems from the rational behavior of market operators who will try to minimize essential ownership. • The aim of our study is to identify factors fostering the renewal of a patent. • We propose a possible definition of a European patent life cycle. • We examine factors that influence the renewal of a European patent.